U.S. Judge Rules in Bacardi’s Favor in Rum Dispute

A U.S. federal judge handed distiller Bacardi Ltd. a victory in a long-running trademark dispute with Pernod Ricer SA of France, rejecting the French company’s effort to block Bacardi from selling Havana Club brand rum in the U.S., The Wall Street Journal reports.  U.S. District Judge Sue Robinson of Delaware denied Pernod’s request for an injunction to bar Bacardi’s U.S. arm from using the brand name. Pernod, which sells rum under the Havana Club name outside the U.S., had argued in a 2006 lawsuit that Bacardi’s use of the name would mislead consumers.

Pernod, the world’s second-largest distiller by sales after Diageo PLC, said Wednesday that it was disappointed by the ruling and planned to file an appeal.

The two companies have been embroiled in a legal battle over the Havana Club trademark since 1996, when a joint venture between Pernod and the Cuban government sued Bacardi over its sale of a Bahamas-made rum it marketed in the U.S. under the Havana Club name. Bacardi subsequently pulled that rum from the U.S. market.

Pernod sells more than 3 million cases of rum a year internationally under the Havana Club name through its Cuban joint venture. That arrangement, which began in the 1990s, excluded exports to the U.S. because of the longstanding U.S. trade embargo against Cuba. Bacardi currently sells its Havana Club only in Florida, and in limited quantities. It declined to disclose sales figures.

Bacardi says it bought the rights to the trademark from the brand’s creators and original owners, the Arechabala family. In 2006, it released a new version of its Havana Club in the U.S., priced at $20 a bottle and made in Puerto Rico. Pernod’s U.S. division sued, alleging that Bacardi was deceiving consumers, and that the Havana Club name couldn’t be used for any rum that wasn’t Cuban. But the judge ruled Tuesday that Bacardi’s labels are neither false nor misleading because they “truthfully [and prominently]” show that the rum is “distilled and crafted in Puerto Rico.”

The judge said the brand has a Cuban heritage because it is based on a family recipe first used in Cuba around 1930. The Arechabala family’s rum-making operations were seized by Fidel Castro’s government after he came to power in 1959. “We commend the favorable decision of the court,” John Esposito, Bacardi USA’s chief executive, said in a statement Wednesday.

For the WSJ report go to http://online.wsj.com/article/SB10001424052702303591204575169911818091240.html

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